Italy is the perfect example of what not to do with public debt

Italy’s public debt ratio is extremely high, but the country’s public debt has not financed additional capital that could lead to additional production or productivity. This has now led to a very dangerous situation in Italy: a very high public debt ratio combined with zero potential growth, which means that even a small rise in euro-zone interest rates would lead Italy to become fiscally in solvent. Authorising a more expansionary fiscal policy because interest rates are very low therefore runs the risk of an Italian-style situation, where fiscal deficits finance only current public spending .